10-14-2005 COMCAST FRANCHISE AGREEMENTAWOf
C O L O R A D O
Janet Rinaldi
Sr. Manager, Government Affairs
Comcast
8000 East Iliff Avenue
Denver CO 80231
Dear Janet:
Post Office Box 975
400 Benchmark Rood
Avon. Colorado 81620
October 14, 2005
Re: Town of Avon Franchise Agreement dated 2/13/96
970-748-4000
970-949-9139 Fax
970-845-7708 %TY
This letter is sent at direction of the Avon Town Council given at their regular
meeting held on October 11, 2005.
The first purpose of this letter is to give Comcast notice, pursuant to Section 7.2(a)
of the agreement, that the Town requests that Comcast provide a PEG Access Equipment Fund up
to fifty cents per subscriber per month for individual residential subscribers and up to twenty-five
cents per subscriber per month for subscribers subject to bulk billing, to a maximum of $10,000 per
year. By agreement reached at the council meeting, Comcast will implement this request effective
January 1, 2006.
The second purpose of this letter is to agree with Comcast that the letter agreement
between TCI Cablevision of the Rockies, Inc. and the Town dated February 13, 1996, is terminated
effective January 1, 2006.
Please sign a copy of this letter in the blank provided and return a copy to me.
TOWN OF AVON
B
LB:jwd
Agreed to this IY t~, day of October, 2005.
Comcast of Colorado VII, LLC
By:
Larry Bks, Town Manager
V0
C O L O R A D O
Janet Rinaldi
Sr. Manager, Government Affairs
Comcast
8000 East Iliff Avenue
Denver CO 80231
October 14, 2005
Re: Town of Avon Franchise Agreement dated 2/13/96
Dear Janet:
Post Office Box 975
400 Benchmark Road
Avon, Colorado 81620
970-748-4000
970-949-9139 Fax
970-845-7708 TTY
This letter is sent at direction of the Avon Town Council given at their regular
meeting held on October 11, 2005.
The first purpose of this letter is to give Comcast notice, pursuant to Section 7.2(a)
of the agreement, that the Town requests that Comcast provide a PEG Access Equipment Fund up
to fifty cents per subscriber per month for individual residential subscribers and up to twenty-five
cents per subscriber per month for subscribers subject to bulk billing, to a maximum of $10,000 per
year. By agreement reached at the council meeting, Comcast will implement this request effective
January 1, 2006.
The second purpose of this letter is to agree with Comcast that the letter agreement
between TCI Cablevision of the Rockies, Inc. and the Town dated February 13, 1996, is terminated
effective January 1, 2006.
Please sign a copy of this letter in the blank provided and return a copy to me.
TOWN OF AVON
Larry B)rj(o-ks, Town Manager
LB "wd
Agreed to this day of October, 2005.
Comcast of Colorado VII, LLC
By:
T
Memo
To: Honorable Mayor and Town Council
Thru: Larry Brooks, Town Manager
From: Scott Wright, Finance Director
Date: October 6, 2005
Re: Comcast Franchise Agreement
Summary:
Town Council, at the August 23rd meeting, tabled at 1st reading the ordinance amending the
Town's franchise agreement with Comcast. Council had several questions and issues with the
proposed ordinance change. In order to facilitate a more infonned response, staff has invited
Janet Rinaldi from Comcast to address Council during Tuesday's worksession.
I have attached to this memo a copy of the minutes from the August 23rd meeting regarding
Council's discussion of the Comcast ordinance, as well as an e-mail from Janet regarding
these matters. Also attached, for reference purposes only, is the ordinance that was tabled.
Town Manager Comments:
Attachments:
Minutes from 08/23/05 Council Meeting
e-mail from Janet Rinaldi
Tabled Ordinance No. 05-10
Page 1
T
Ordinances
Scott Wright, Finance Director, presented Ordinance No. 05-10, First Reading, Series of 2005,
Ordinance amending the Franchise granted to Cablevision VII, Inc. d/b/a Comcast of Colorado
VII, LLC and approving an amendment to the Cable Franchise Agreement between the Town
and Comcast. He summarized the amendment in that it would terminate the 1996 letter
agreement that requires Comcast to pay an annual grant of $10K directly to Vail Valley Cable
TV. In lieu of the grant, a $.65 PEG Fee would be collected and remitted to the Town of Avon
on a quarterly basis beginning in 2006. Mayor Pro Tern Underwood indicated that the last
council request was to obtain a detailed accounting of the transactions, and in turn try to
understand what was done with any excess money as well as hopefully clarify why Comcast is
charging $.65 instead of $.50. A review was made of what transpired since the original passage
of the franchise agreement and what the obligations are included in the agreement. Comments
were made about some of the following items:
Should monies over $10K should be assessed and collected
✓ Why commercial accounts were allowed to be exempt from paying the fee
✓ What happens if external costs allowed by the Federal Code of Regulations are no
longer fees required to be collected, the question was what happens to our, agreement at
that point?
✓ Be accountable to citizens and fix/control/cap the subscriber fee
✓ Ask that Channel 5 be accountable for its financial position and sound business plan as
submitted to the Town
After further discussion, a summary of the topic was noted by Mayor Wolfe as follows:
✓ Both residential & commercial should pay PEG
✓ Collect a minimum of $1 OK from Comcast to flow through the Town of Avon
✓ Excess monies of whatever the capped PEG generates should also come to the Town
Council, any monies passed on to Channel 5 should be justified
✓ The Town would be allowed to reduce the PEG fee if necessary
Town Attorney John Dunn noted that the letter agreement and the franchise agreement are
inconsistent with each other and that this action would eliminate the inconsistency that occurs.
Further conversations occurred about the bulk rate collections and how that impacts the
collection of the $10K. Mayor Wolfe suggested tabling the Ordinance at this time. Mayor Pro
Tern Underwood moved to table Ordinance No. 05-10, First Reading, Series of 2005, Ordinance
amending the Franchise granted to Cablevision VII, Inc. d/b/a Comcast of Colorado VII, LLC
and approving an amendment to the Cable Franchise Agreement between the Town and
Comcast, with the following changes recommended:
✓ $.50 fee per residential subscriber
✓ Insure that bulk subscriber continues to pay the current $.25
✓ That Comcast is obligated to $1 OK per year minimum, regardless of what they collect
✓ That all PEG Fees will be paid to the Town of Avon and will be disposed of as the Town
Council deems appropriate to Channel 5 / or public access TV
✓ And if external costs somehow are extinguished for flow through in this way as dictated
by the federal government or some other regulation, that Comcast will submit a check in
the amount collected in the previous year and going forward with an increase that is
calculated by CPI percentage.
Councilor Ferraro seconded the motion and it passed unanimously with a roll call vote.
Regular Council Meeting Page 2 of 3
August 23, 2005
Scott Wriaht
From: Rinaldi, Janet [Janet _Rinaldi@cable.comcast.com]
Sent: Monday, September 19, 2005 2:22 PM
To: Scott Wright
Cc: John Dunn; Trueblood, Mike
Subject: RE: Town of Avon Ordinance
Scott:
I can understand the confusion surrounding PEG Fees and hope to clarify the current
arrangement with the Town of Avon. Currently, the $10,000 annual grant is paid directly
to Vail Valley Cable TV pursuant to the February 13, 1996 letter agreement, which
supersedes the PEG obligations contained in Section 7.2 of the Franchise.
Federal law allows the Cable operator to fully recover PEG grants that are paid to a
franchising authority. Comcast elected to exercise this right pursuant to federal law in
August 2003 by including a line item in the amount of $.65 on the bills of residential
subscribers (those not billed on a bulk billing basis and excluding commercial
subscribers). The amount of the monthly PEG Fee was determined by dividing the $10,000
grant by the number of residential subscribers within the Town of Avon, and then dividing
by 12. Prior to that, the cable operator had been paying this grant and not collecting
PEG Fees from any subscribers, be they residential or commercial or billed on a bulk
basis. A detailed accounting of this was provided to you on May 4, 2005. That accounting
showed that the Comcast had made a total of $90,000 in PEG Grants, of which only $16,782
has been recovered as of March 2005. As a result, all PEG Fees collected are retained by
Comcast to recover the $10,000 annual grant.
We do not collect PEG fees from commercial accounts or accounts that are billed on a bulk
billing basis. Accounts that are billed on a bulk basis such as multiple dwelling units
(MDUs) involve an arrangement between landlord and tenant that includes cable service as
part of the rent paid to the landlord by the tenant. Comcast receives one payment from
the owner or operator of the MDU that represents cable services for all the units in the
MDU. Our contracts with these properties specify a fixed rate that is inclusive of taxes
and fees. If we were to increase the fee charged to these properties by including a PEG
Fee, we would be in violation of these agreements. Further, it would represent a
substantial price increase to the property and would likely result in losing that business
to a competitor that is not required to pay PEG or Franchise fees.
By agreeing to amend the franchise and rescind the letter agreement, Comcast would remit
to the Town only those monies collected through the PEG fee. It could be either less than
or in excess of the $10,000 annual payment currently being sent directly to Vail Valley
Cable TV. If the Town agrees to a PEG fee less than $.65, then PEG Fees collected would
be substantially less than $10,000.
It is difficult to speculate what would happen if federal legislation changes such that
the cable operator is no longer allowed to pass through the PEG Fee. There are currently
no bills before federal legislators that speak directly to the issue of PEG fees. It is
anticipated that the Cable Act will be undergoing a major rewrite, which could take
several years. If federal legislation changes, both franchising authorities and cable
operators will be bound to whatever changes are made in federal law.
We look forward to attending your meeting on October 11 and can address any additional
questions you or council have regarding this matter.
Janet Rinaldi
Sr. Manager, Government Affairs
Comcast
8000 E. Iliff Avenue
Denver, CO 80231
(303) 603-5015
(303) 603-2077 FAX
email: janet-rinaldi@cable.comcast.com
I
-----Original Message-----
From: Scott Wright [mailto:SWright@avon.org]
Sent: Tuesday, September 06, 2005 3:22 PM
To: Rinaldi, Janet
Cc: John Dunn
Subject: Town of Avon Ordinance
Janet,
The Town Council, at their last meeting tabled at 1st reading the ordinance amending the
franchise agreement. I am attaching the section of the minutes taken by our Town Clerk
that covers their discussion.
The Council had one question that I was unable to answer as follows: Why was the $.25 PEG
fee for bulk subscriber accounts taken out of the proposed ordinance change? Is the $.25
fee currently being charged to bulk subscribers?
Bottom line, I think what Council would like to see in the amendment in addition to
terminating the letter agreement is an obligation on the part of Comcast to remit the
$10,000 to the Town in the event that there is some federal legislation that would prevent
the Town from passing through the PEG fee. I believe everything else is already covered
in the existing franchise agreement.
Please let me know as soon as possible if this is something Comcast would be willing to
obligate themselves to.
Scott
<<Ordinance No. 05-10 Discussion.doc>> << File: Ordinance No. 05-10 Discussion.doc
a
.f
ORDINANCE NO. 05-10
AN ORDINANCE AMENDING THE FRANCHISE GRANTED
TO CABLEVISION VII, INC. dba COMCAST OF COLORADO
VII, LLC AND APPROVING AN AMENDMENT TO THE
CABLE FRANCHISE AGREEMENT BETWEEN THE TOWN
AND COMCAST.
WHEREAS, the Town has previously granted a non-exclusive franchise to
Comcast of Colorado VII, LLC, successor in interest to Cablevision VII, Inc. ("Comcast" or
"Grantee"); and
WHEREAS; the Town and Comcast are parties to a nonexclusive cable television
franchise agreement effective March 7, 1996 ("Franchise Agreement"); and
WHEREAS, Section 7.2 of the Franchise Agreement sets forth the terms and
conditions under which the Town can request Comcast to provide a PEG Access Equipment
fund; and
WHEREAS, the Town has determined that it is in the best interest of the public to
amend the Franchise Agreement subject to the terms and conditions contained herein.
NOW, THEREFORE, BE IT ORDAINED BY THE TOWN COUNCIL OF THE
TOWN OF AVON, COLORADO:
Section 1. Section 7.2 of the Franchise Agreement is hereby deleted and replaced
with the following:
(a) Effective January 1, 2006, Grantee shall provide a PEG Access Equipment fund
up to sixty-five cents ($.65) per residential subscriber per month to be used solely
for PEG Access Equipment. The PEG Access Equipment fund will not be
charged to commercial subscribers that are subject to a bulk billing arrangement.
(b) The PEG Access Equipment fund shall be paid by Grantee to Grantor quarterly,
on a concurrent basis with the franchise fee payment.
. Section 2. The AMENDMENT TO THE CABLE TELEVISION FRANCHISE
AGREEMENT BETWEEN TOWN OF AVON AND CABLEVISION VII, INC., dba
COMCAST OF COLORADO VII, LLC., a copy of which is attached to this Ordinance as
Exhibit A, is approved.
Section 3. Except as amended herein and except to the extent superseded by
changes in federal law, the terms and conditions of the Franchise Agreement and the non-
exclusive franchise heretofore granted to Comcast shall remain in full force and effect.
6
INTRODUCED, APPROVED, PASSED ON FIRST READING AND
ORDERED POSTED the 23rd day of August, 2005, and a public hearing on this ordinance shall
be held at the regular meeting of the Town Council on the 13th day of September, 2005, at 5:30
P.M. in the Council Chambers, Avon Municipal Building, 400 Benchmark Road, Avon,
Colorado.
Ronald C. Wolfe, Mayor
ATTEST:
Patty McKenny, Town Clerk
INTRODUCED, FINALLY APPROVED, and PASSED ON SECOND
READING AND ORDERED POSTED the 13th day of September, 2005.
Ronald C. Wolfe, Mayor
ATTEST:
Patty McKenny, Town Clerk
APPROVED AS TO FORM:
John W. Dunn, Town Attorney
EXHIBIT A
AMENDMENT TO THE CABLE TELEVISION FRANCHISE AGREEMENT
BETWEEN
THE TOWN OF AVON
AND
CABLEVISION VII, INC., dba COMCAST OF COLORADO VII, LLC
WHEREAS, The Town of Avon, ("Town" or "Grantor") and Comcast of Colorado VII, LLC,
successor in interest to Cablevision VII, Inc. ("Comcast" or "Grantee") are parties to a
nonexclusive cable television franchise agreement effective March 7, 1996 ("Franchise
Agreement"); and
WHEREAS, Section 7.2 of the Franchise Agreement sets forth the terms and conditions under
which the Town can request Comcast to provide a PEG Access Equipment fund; and
WHEREAS, the Town and Comcast's predecessor in interest entered into a letter agreement
dated February 13, 1996 ("Letter Agreement") setting forth an annual capital contribution grant
of $10,000 to be paid directly to Vail Valley Cable TV, and the Letter Agreement supersedes any
requirement for separate PEG fees to be paid to the Town pursuant to Section 7.2 of the
Franchise Agreement; and
WHEREAS, the Town and Comcast have determined that it is in the best interest of the parties to
terminate the Letter Agreement and amend the Franchise Agreement subject to the terms and
conditions contained herein.
The Town and Comcast agree as follows:
2. Section 7.2 of the Franchise Agreement is hereby deleted and replaced with the
following:
(a) Effective January 1, 2006, Grantee shall provide a PEG Access Equipment fund
up to sixty-five cents ($.65) per residential subscriber per month to be used solely
for PEG Access Equipment. The PEG Access Equipment fund will not be
charged to commercial subscribers that are subject to a bulk billing arrangement.
(b) The PEG Access Equipment fund shall be paid by Grantee to Grantor quarterly,
on a concurrent basis with the franchise fee payment.
3. Except as amended herein and except to the extent superseded by changes in federal
law, the terms and conditions of the Franchise Agreement shall remain in full force
and effect.
A
4. The Letter Agreement is hereby terminated and Grantee is no longer required to pay
the $10,000 annual capital contribution grant directly to Vail Valley Cable TV.
TOWN OF AVON
ATTEST:
By:
Its:
Accepted this
day of
By:
Its:
Date:
2005 by Comcast of Colorado VII, LLC.
By:
Scott Binder
Senior Vice President